Art. 23 Inc. Tax on Gold-Related Service Contracts Signed Before 1 May

“Supplies of services … performed based on an agreement signed before the enactment of this ministerial regulation and payments for the said services performed since the enactment of this ministerial regulation, shall be subject to Article 23 Income Tax withholding,” reads a fragment of Article 24 of MoF Reg. 48/2023, quoted on Tuesday (9/5/2023).

As stipulated under Article 8 paragraph (2), services related to gold jewellery, gold bullion, non-solid gold jewellery, gemstones and other stones subject to income tax withholding include modification services, repair services, plating services, gilding services, cleaning services and other similar services.

If the remuneration in respect of gold-related services is received by corporate Taxpayers or permanent establishments, the remuneration shall be subject to Article 23 Income Tax withholding. On the other hand, the remuneration received by resident individual taxpayers is subject to Article 21 Income Tax withholding.

Income tax is withheld by the party paying the remuneration that constitutes an income tax withholding agent. The rates and tax bases used for the withholding of Article 23 Income Tax or Article 21 Income Tax shall comply with applicable statutory tax provisions.

After withholding, withholding agents must prepare withholding receipts, remit income tax to the state treasury and file the withholding in Periodic Income Tax Returns pursuant to statutory tax provisions.

If the party receiving the remuneration for gold-related services is a taxpayer that uses the MSME final income tax or a taxpayer that has a withholding exemption certificate, the remuneration provider does not withhold income tax. (rig)